Problems with the concept – can a company be socially responsible?
Many organisations criticise CSR because they don’t see business delivering on its promises. However, the problem isn’t simply that companies aren’t practising CSR very well, it’s that the corporate structure is not capable of social responsibility.
What is responsibility?
Responsibility suggests responsiveness, obligation, control, authority and a duty of care. So is the word really appropriate in this context? Through CSR companies seek to engage with stakeholders, but without implying a duty to respond. They claim credit for positive, or simply less harmful actions, without taking on any obligation. They prefer the word ‘commitment’ to ‘duty’. For example, corporate and government definitions invariably make reference to the idea that CSR means actions taken by companies which go beyond legal requirements – in other words actions which they have no obligation to carry out. The scope of a company’s ‘responsibility’ is therefore self-defined and not socially defined. Also it cannot be measured, so value can be assigned arbitrarily: perfect PR. In For Business Ethics, Jones, Parker and ten Bos contend that by cherry-picking which stakeholders they engage with, corporations are misusing the term responsibility and trading on its positive connotations. They contend that responsibility means ‘unconditional openness in response to the other, without knowing in advance who the other might be or how to respond’, whereas companies engage only with those that are useful to them, and rather than responding, they distract or placate.
What is a corporation?
A company is the property of its shareholders. Company directors are legally bound to act solely in the best interest of the company’s owners. As Joel Bakan argues in The Corporation, this creates a structure which is pathological in its pursuit of profit. Corporations aren’t just greedy, the only concern they can have is to concentrate wealth in the hands of their shareholders. Through CSR companies trumpet their ‘values’, but a company can only have one value: its share-price.
Economist Milton Friedman says that because a company is the property of its shareholders, CSR can only be insincere. In other words, companies can only make a decision which favours the wider social good if the outcome is also the most profitable one. So, the wider social good can only ever be incidental to the interest of making a profit. This is a total reversal of conventional moral priorities that place the interests of society over selfinterest. It is also quite different from the picture of the altruistic and community-minded corporation-that-cares which is presented to the public. CSR only works if the public accepts the notion that corporations can make moral choices. If the public believed that ‘socially responsible’ companies are simply acting in a way which advances their own interests, would they reward them for doing so? If profits are primary, then can CSR really make a difference to the problems corporations are causing? What happens when tackling social or environmental problems does not support economic growth? As Corporate Watch’s ‘Corporate Law and Structures’ report asserts, ‘for the corporate environmentalist’ … the first aim is to make as much money as possible, but given two ways to make that money they choose the one that requires the least murder, blatant theft or environmental destruction’. Since CSR will not bring an end to destructive activities for as long as they are profitable, can it really be described as ‘responsibility’? Corporations have highly destructive impacts on society and the environment, and they are the dominant institution in our society, so if the only type of actions that they can take to mitigate their destructive impacts are the most profitable ones, then prospects for the planet do not look good. Something in this equation has to change, and CSR does not look like the vehicle through which to do it.